Royal Bank (RY.TO)

RY-T vs. CM-T. CM-T is cheaper. The PE is 9 vs. RY-T at 12. The market and street are starting to blend in a discount to CM-T because of the housing market as they are the most exposed. He would still hang his hat on RY-T because their global and domestic franchises are fantastic. They are trying to get into the US right now although are late to the game. He would still go for RY-T because it is more defensive.

(A Top Pick July 28/16. Up 20.69%.) At the time, he felt short interest was too high in the banks and that this had a better mix than the other banks. Still likes.

Banks as a group have been more or less sideways. You can buy this at these prices. The dividend is quite safe and will likely be increased. Recent numbers were quite good. You pay a little bit of a premium for this bank, because it is the biggest bank in Canada. In terms of sources of revenue, it probably has the least risk.

Banks have largely been ignored in terms of their potential for throwing off free cash flow and increasing benefits to shareholders, whether through direct dividends or through international growth. Canadian banks tend to earn 15%-20% domestically on ROE, which throws off a lot of capital that has to be reinvested. It can’t all be reinvested in Canada. This bank has a large advantage there. Dividend yield of 3.9%. (Analysts’ price target is $102.)

(A Top Pick Dec 9/16. Up 40%.) Bought a Long-term call at $4.50. The option is still valid and doesn’t expire until next January.

Chart shows a nice upward trend, with a bump upwards due to the election, and then coming back and testing, and is now on the way up again. Dividend yield of 3.7%. (Analysts price target is $102.)

(A Top Pick June 27/16. Up 29.82%.) One of his 3 favourites along with Bank of Montréal (BMO-T) and Toronto Dominion (TD-T). This is one that you can buy here and hold it happily. (See Top Picks.)

(Market Call Minute) He would buy this for bank exposure as he expects a turn in financials.

(A Top Pick June 17/16. Up 26%.) The catalyst on this was a big Short interest as speculators felt that Canada would really fall apart. He still sees this growing at 4.5% over the next couple of years. It is outperforming its peers on an operating leverage, even without restructuring. Had a very solid print on Q2. This is at a level where you could start adding to it now.

(Top Pick Jun 14/16, Up 26%) One of the top three banks, which she owns. There were hedge funds shorting them based on housing, but it has gone through that. They have a diversified business. It had increased its dividend earlier this year to around 3.8%. Earnings will grow 7-8% this year and dividends should increase.

CIBC (CM-T) or Royal Bank (RY-T)? CIBC is the perennial laggard of the big banks, because historically it has been accident prone. Also, they don’t have the International areas like the others. Royal always has a higher premium. You have to ask if you want more domestic exposure or something with a little more US flavour.

Toronto Dominion (TD-T) or Royal Bank (RY-T) for a long-term buy? He is basically an investor in Toronto Dominion. It got off the mark before anyone else, in terms of getting a position in the US, and thinks that is going to be very important. The Royal was late to the game getting into the US.

He expects the earnings, coming out next week, are going to be pretty good. The notion that they are taking losses on mortgages is ridiculous. He sees no evidence at all that Canadian banks have lost money on real estate. This bank has been making money in private wealth management, and have probably done okay in trading. He would always wait until after earnings before making an initial purchase.

She wanted to choose a bank, to show that she likes the banking sector. This has pulled back from the beginning of the year. All the banks had a great year last year, so she doesn’t expect returns of 25%-26%. They have about 25% exposure to the US, and she thinks the US economy is going to grow faster than the Canadian. Acquired City National which focused on high net individuals and commercial loans. Dividend yield of 3.7%. (Analysts’ price target is $101.)

Owning Canadian bank stocks has never really hurt. In years when stock performance is weak, you tend to get a little bit of a dividend, so you get paid while you wait.